What is free-market capitalism? 47

This post was born as a comment by our economist reader and contributor, Don L. He expanded it into an article. 

It is addressed to the average American who earns, banks, invests, and pays taxes, but might confess that he doesn’t really understand “the dismal science” (as the Scottish philosopher Thomas Carlyle called Economics). Free-market capitalism is the only system that benefits everybody, and the only economists who were right about this were those of the Austrian School (of which the best known members are, probably, Ludwig von Mises and Friedrich Hayek). The article points the way to finding out what free-market capitalism really is. 

The possibly surprising point the author makes is that the United States is not really the free-market capitalist country it is purported to be …  

**

There’s a tactic employed in the field of Economics, and other corrupted fields of study/“professionalism” (history, law, meteorology/climate, education/compulsory schooling, etc.) that I label the “3rd-Party Authority Justification & Deflection Tactic”.  The tactic invokes authority to implement a plan and the ability to escape blame when it fails: “We relied on the experts.” And, the experts (unjustified) sell their name and authority (the “Top 500”, the “Leading” or the “Council of Advisers”, etc.) for grants, subsidies, a new regulation or a tit-for-tat pay raise. Being right is subordinated to the reward from political benefactors: “We support the Senators program”; which, as all unconstitutional social plans do, inevitably fails with tragic consequences.

It must be understood that in the US of A it is estimated that from 53% to 60% of ALL economists are employed directly by government (split approx. 60/40 percent by federal and state respectively) with another 20% plus estimated to be employed in positions dependent on government support. Upton Sinclair said it best: “It is hard to get a man to understand a thing when his job depends on his not understanding it.”  (Do you think there might be a “favor government” over human beings bias in the profession? DUH)

The challenge stands: The Austrian economist Robert Murphy challenged the icon of leftist economics, Paul Krugman, to debate. The inducement was a prize of $100K to be given to a food bank in NYC if Krugman merely showed up …he has refused. Consider, he refused to just put in an appearance and thereby denied a food bank, the hungry, a windfall of $100K of needed funds/foodstuffs. So much for social justice; even primary leftist cause takes a back seat to being exposed as a fraud. He’s a fraudulent coward!

A debate on what the political economic policy should be has never happened. Indeed, every measure is taken to insure that economics qua economics is never ever exposed to the general public. Mainstream economics is as fake as mainstream news. It is a fraud, sham, scam and lie. What is shoved down our throats as economics is singularly and only government central planning of the economy. Economics qua economics is a descriptive social science requiring thinking. IT IS NOT pretend hard science employing mathematical-modeling of historic, static, limited point-in-time data toward predicting (crystal ball) the future for unconstitutional, politicized, social engineering.

The world has been brought, through ideologically-designed compulsory schooling , to unquestionably believe the lie that the economy is so large and complex that only experts can manage it. Yes, the economy is large and complex … SO? How does “manage it by experts”  follow? IT DOESN’T.

In fact it was at the end of the 19th and into the 20th century that the answers to all the significant questions about economics, after 500 years of scholarship, were finally answered. And, the paramount finding was the irrefutable fact that an economy cannot and ought not be managed at all; by anyone whether “expert” or not.

These findings, however, did not and do not sit well with the rulers … implementation requires  stripping them of their power over the people: He who has the gold makes the rules. Well, simultaneous with the revelations of real economics, the opportunist and clownish son of a noted economist, admittedly fabricated a politician-pleasing economic theory, out of thin air (like the phony money monetary policies he backed – the FED). The sophomoric son was John Maynard Keynes and his ludicrous and wholly incomprehensible theory was presented in his book The General Theory of Employment, Interest and Money.

Keynes’s theory has been totally destroyed, yet it persists because it justifies – absolute nonsensical and proven tragically wrong – government intervention in the economy: social engineering. Marx – also a failed thinker with a failed tragic theory – and Keynes have done more to destroy lives, wealth and natural resources than any other two men. They provided the “3rd-Party Authority Justification & Deflection Tactic” cover, employed by governments around the world, behind which rulers could hide as they engineer “social justice” – i.e. control and manipulate their populations. Like here in the good ol’ US of A.

Incidentally, the supposed icon of Free-Markets, Milton Friedman, was NOT!  In fact, Friedman naively supported the worst and most deleterious of the government interventions, thereby negating his promotion of free enterprise (curiously not free-markets): monetary manipulation (inflation) for the benefit of government – not the governed!

Austrian economics, for those who do not know, is the only school of economics that does NOT incorporate any notion of government intervention in the economy – ALL OTHERS DO! Austrian Econ is the only school that advances Free-Market Capitalism; which mirrors, coincidentally, the Founder’s principles of individual sovereignty and government by the consent of the governed.

It is the only school that has been proven correct, 100% of the time, in projections and warnings for more than 100 years. Name one economist from any other school that has ever been right. That was rhetorical as one cannot find any other school of economics that has ever been correct …PERIOD. All they offer is the fake cover for fraudulent banking schemes that benefit politicians and their cadres of sycophants.

If you don’t know what free-market capitalism IS, you can be made to believe it is the economic system in America when it isn’t; and, IT ISN’T!

If you don’t know what free-market capitalism IS, you can be made to believe it is the cause of all manner of horrific and immoral human tragedy when it isn’t; and, IT ISN’T!

If you do not know what centralized fractional reserve banking is then you have to begin to ask yourself: “How have I been made to not care about my own best interests?” Why? Because centralized fractional reserve banking IS the fascistic political economic system of the united States of America NOT Free-Market Capitalism! It was enacted as law in 1913. It replaced Free-Market Capitalism with what can only be described as Centrally-Planned “Debtism” (dollars do not represent wealth but, rather, DEBT). You may know it’s intended-to-deceive name: The FED – not a federal government entity. How is it you have never been taught this?

Economic tragedies cannot be blamed on an economic system that does not exist. Every economic turn down in America’s history is directly and demonstrably the fault of government intervention in the economy; specifically, monetary manipulation by the FED. And, not one bit of it is FREE-MARKET CAPITALISM! So, why is it blamed? Well, the planners aren’t going to blame themselves … are they?

If life, liberty and prosperity are inextricably linked to the economy and there can be no exercise of rights, unalienable or otherwise, without economic freedom, how is it over 95% of Americans, including bankers and top CEOs, do not know what centralized fractional reserve banking is or does – to their detriment.

NOTE: Centralized fractional reserve banking IS the system by which purchasing power (wealth) is stripped from those on the lowest rungs of the economic ladder and transferred to those already up the ladder and standing on the roof: currency inflation is the FED’s ONLY function.

It is time that every citizen fulfilled his duty to give INFORMED consent. First, each individual must take the time to discover Free-Market Capitalism – Austrian economics. Once done, the informed citizen will never be Lulled, Gulled & Dulled by duplicitous and/or dangerously ignorant career-politicians, their army of cronies and their deceptive 3rd-Party Authority Justification & Deflection Tactic ever again … GUARANTEED!

Here’s some further “discover” info:

Keynes The Man by Murray N. Rothbard

Where Keynes Went Wrong: And Why World Governments Keep Creating Inflation, Bubbles, and Busts by Hunter Lewis

A Free-Market Monetary System and The Pretense of Knowledge by F. A. Hayek

Recovering Economics by Harry C. Veryser

The Red Prussian by Leopold Schwarzschild

QUICK INTRODUCTION TO AUSTRIAN ECONOMICS:

Why Austrian Economics Matters by Llewellyn H. Rockwell, Jr

What is Austrian Economics? — The Ludwig von Mises Institute

Economic Policy: Thoughts for Today and Tomorrow by Ludwig von Mises

Liberty and Property by Ludwig von Mises

 

Don L     April 5, 2018

(For more books that will aid discovery in the field of of Economics, please see The Atheist Conservative’s (starter) reading list, under Pages in the margin.)

Posted under Economics by Jillian Becker on Thursday, April 5, 2018

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Two views of capitalism 4

At Townhall, John C. Goodman presents and discusses two views of capitalism as expounded by Professor Johnathan Haidt.

The two views are summed up by these videos, made by Professor Haidt.

Capitalism as Exploitation

Capitalism as Liberation

John Goodman comments:

Now I would argue that one of these views of capitalism is factually incorrect. It’s not just a matter of “political and moral values” [as Haidt asserts]. In fact, in a video presentation of his theory, Haidt shows a chart mapping per capita income throughout all of human history. The chart shows (and this should be well known to all economists) that up until the last few hundred years the average human lived on about a dollar a day – in modern terms. At times and places, they might have enjoyed two dollars a day. If they were really, really lucky they might have hit three dollars a day. But that was it.

In other words, for 100,000 years our ancestors lived at the subsistence level. And then [with the advent of the Industrial Revolution – ed] we got capitalism. By that I mean not just free exchange, but also the institutions of capitalism, including enforceable property rights …

In all its guises the exploitation theory has one central message: the reason why some people are poor is because other people are rich. Here is Paul Krugman explaining why middle income families don’t have higher incomes. …

Soaring incomes at the top were achieved, in large part, by squeezing those below: by cutting wages, slashing benefits, crushing unions, and diverting a rising share of national resources to financial wheeling and dealing. Perhaps more important still, the wealthy exert a vastly disproportionate effect on policy. And elite priorities — obsessive concern with budget deficits, with the supposed need to slash social programs — have done a lot to deepen the valley of despond.

Really? J K Rowling (author of the Harry Potter series) is the richest woman in the world. Did she get rich by “cutting wages, slashing benefits, crushing unions,” etc.? I thought she got rich by writing books. How about Oprah? Has she “slashed” any benefits lately? What about Bill Gates and Warren Buffett? When is the last time they were out there encouraging scabs to cross a picket line?

Krugman’s point about political influence is almost as silly as his view of the economy. Earth to Krugman: the real base of the Democratic Party (the party of the left) has become the ultra-wealthy. And their political goals are harmful to the middle class, but not in the way that Krugman imagines. …

The problem for Democrats is that the party is increasingly ruled by the “new oligarchs”  … [who]  are basically anti-job creation and anti-economic growth – which they see … as a threat to their life style. This puts them squarely at odds with the working class voters who used to be the backbone of the Democratic Party. …

The Democratic Party is [now] the party of the poor and the rich. It’s the middle class that is bolting and voting Republican. And what do the rich want from Democrats? Contra Krugman, they’re not demanding smaller deficits or smaller social programs or even lower taxes. What they want – in addition to looney environmentalism – is for government to protect their life style.

Once the plutocrats settle in a community they become fiercely anti-development and shape their communities in ways that price the middle class out of the housing market. As a result, wherever wealthy liberals tend to congregate, housing is more expensive …

Limousine liberals are a threat to the average worker. But not because they are wage-suppressing, union-busting, exploiters. It’s because their anti-capitalist goals are at odds with the aspirations of ordinary Americans.

It seems to be the case that most – probably all – of the successful entrepreneurs who live in Silicon Valley vote Democratic. Having achieved their own riches in the freedom of opportunity for the individual that the capitalist system gave them, they vote for socialism and the removal of individual freedom that it ensures, so others cannot do what they did.

Down with the Fed! 4

From Mauldin Economics: Things That Make You Go Hmmm…

If you jump to the 27:00 minute mark of this edition of The Charlie Rose Show, you will find an excellent interview with David Stockman about his wonderful recent book, The Great Deformation. Stockman finally gets the platform he deserves with Charlie Rose, and I urge you to watch him explain why the Fed is a perennial “bubble machine”. Stockman’s takedown of Paul Krugman alone is worth the price of admission — though even the normally neutral Rose can’t resist taking a shot at a former establishment insider turned outsider.

Posted under Commentary, Economics, United States, Videos by Jillian Becker on Tuesday, April 15, 2014

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The open secret of prosperity 8

When not making excuses for President Obama’s dismal economic record, liberals try to explain away Texas’ stellar growth. But … the Lone Star State proves limited government works. …

Economist and New York Times columnist Paul Krugman called it the “Texas Unmiracle.” Time magazine dismissed Texas’ burgeoning growth as mere luck. Others chimed in along the same lines, insisting that low taxes, limited government spending and a business-friendly environment couldn’t possibly have anything to do with Texas’ better-than-average growth in GDP, jobs and incomes. And so, as Krugman put it, Texas “offers no useful lessons”.

We quote from an Investor’s Business Daily report on the economic success of Texas – resulting from its “un-liberal policies”.

An article this week in Washington Monthly written by Phillip Longman and titled “Oops: The Texas Miracle That Isn’t” spends 4,700 words claiming to have exposed the miracle as a fraud. But his debunking effort turns out to be phony.

Longman admits Texas has “outperformed the rest of the country in its growth of high-paying jobs.” That, he says, is “potentially a very big deal.” So he spends the rest of the article trying to explain it all away. He argues, for example, that the growth is almost entirely due to the boom in oil and gas production, though that industry directly accounts for just 8% of the new jobs.

In any case, he overlooks the fact that the oil and gas industry is doing well because Texas — unlike other energy-rich states such as, say, California — isn’t smothering it to death with regulations.

Longman then tries to deny the fact that people are flocking to Texas from other states in search of opportunity by citing just one year’s data on net migration — from 2010, a relatively low year for Texas.

Truth is that, since 2000, Texas has enjoyed a net migration of more than 2 million people, accounting for 40% of its total population growth, according to Census Bureau data. Between 2005 and 2012, nearly a quarter-million came from California alone.

Another way to look at it: In just five years, $14.4 billion worth of income shifted from other states to Texas, according to the Tax Foundation. Over the same years, liberal bastions such as California lost $15.8 billion, New York $21 billion and Massachusetts $4 billion.

Does that look like a “low level of net domestic migration to Texas”? Clearly, people are moving to Texas for a reason. And that mystifies those on the left because Texas has fewer government services, doesn’t try to soak the rich and spends less per student on education. Never mind that Texas students get a better education than those in big-spending California, according to a McKinsey & Co. study. Or that it has a lower poverty rate than California and New York.

And this migration trend isn’t limited to Texas. Between 2000 and 2011, the states with the biggest gains were more conservative, while the biggest losers were all liberal, according to a state freedom index report from the George Mason University Mercatus Center. …

Fact is, Texas has pursued decidedly un-liberal policies. It has one of the lowest levels of government spending, among the lowest tax burdens and consistently ranks as the most business-friendly state in the nation.

As a result, its real economy grew 13% between 2009 and 2012 — twice as fast as the nation overall. Private-sector jobs climbed 12% since Obama’s “recovery” started 4-1/2 years ago, compared with 7% nationwide. And per-capita income has been rising faster — 50% since 2000 vs. 44% nationwide. …

Texas is just an example of what invariably happens when a state, or nation, pursues free-market economic policies. And that’s why the left is so desperate to make its success disappear.

No state can have a truly free market when the federal government is regulatory, controlling, and redistributive as it is now. But Texas shows what can be done even in these trying circumstances.

Listen to Governor Perry of Texas. It’s a thrilling and rousing speech.

(Hat-tip for the video, our reader and commenter donl)

Frightening sympathy 6

The British Conservative James Delingpole, with whom we usually agree, writes at the Telegraph about the dismal view he takes of the Republican Party candidates in this year’s presidential election.

His assessment of them is so dismal that he thinks that letting Obama, “the POTUS from hell”,  wreck the country for another four years would be a better choice than electing any of them.

We cannot wholly agree with him this time because we think no one on the political horizon could be worse for America than Obama, but we like his article and see his point:

Let’s get one thing clear: Obama unquestionably ranks among the bottom five presidents in US history. In terms of sublime awfulness he’s right up there with our late and extremely unlamented ex-PM Gordon Brown – which is quite some doing, given that Brown singlehandedly wrought more destruction on his country than the Luftwaffe, Dutch Elm Disease, the South Sea Bubble, the Fire of London and the Black Death combined.

Agreed: the damage President Obama has done to the US economy with everything from Ben Bernanke’s insane money-printing programme, to his cancellation of the Keystone XL pipeline, to his ban on deep-water drilling to his crony capitalism hand-outs to disaster zones like Solyndra to his persecution of companies like Gibson is incalculable. And, of course, if he gets a second term the damage he and his rag-bag of Marxist cronies at organisations like the Environmental Protection Agency manage to inflict on the US small businessman trying to make an honest buck will make his first term look like Calvin Coolidge on steroids.

So why do I think this would be preferable to a presidency under Mitt Romney? Simple. Because I’ve seen what happens, America, when you elect yet another spineless, yet ruthless, principle-free blow-with-the-wind, big government, crony-capitalist RINO squish. His name is Dave Cameron – and trust me, the cure is far worse than the disease.

Of course it may not seem that way at first. You’ll be so busy dancing round in circles singing “Ding Dong the witch is dead!” that euphoria and relief will completely overwhelm your intellect and your powers of observation. You’ll read endless articles by David L Brooks, the New York Times’s pet pretend-conservative, telling you how Romney is just the kind of uniting, post-partisan, pragmatic POTUS America needed. And you’ll believe it because you’ll want to believe it. This may last for some considerable length of time. In Britain, many Cameroon conservatives … continue to perform this auto-lobotomisation even now.

But then, little by little, something rather unpleasant will begin to dawn on you. The label on the can may have changed but the contents taste remarkably similar. Similarly emetic, that is.

Yes, I know from the other side of the pond David Cameron may look just the kind of stand-up conservative you’d like running the US. But that’s only because the stories you hear about him are extremely selective. For example, I’m constantly surprised by US talk show hosts telling me how tough on militant Islam Cameron is because of some speech they heard Dave give once about the problems of multiculturalism.

But surely we should judge our political leaders by what they actually achieve rather than (Tony Blair-style) by what they tell us they are achieving.

Here are some of David Cameron’s achievements so far:

He has prolonged the economic crisis …

He has urged quotas for women in the boardroom, apparently in the belief that the State has either the knowledge or the right to decide how business conducts its affairs.

He has presided over a massive wind-farm building programme which, besides destroying the British countryside and enriching his father-in-law, is causing energy bills to soar to the point where old people are dying of hypothermia.

He has surrendered at almost every turn to the Carthaginian terms offered to Britain by the European Socialist Superstate.

He has proved himself incapable of expelling the Islamist hate-preacher Abu Qatada. [See our post The tale of a Muslim terrorist parasite, January 18, 2012.]

The list is by no means exhaustive. I would go on but, actually, this was never meant to be a “collected examples of the unutterable crapness of David Cameron” blog. Rather, it’s supposed to be a more generalised warning about the dangers of short-termist thinking.

Yes, of course, conservative/libertarian America, I fully understand how desperate you are to rid yourself of the POTUS from hell. But what you need to ask yourselves – and I don’t believe many of you are: you’re a bit like an hysterical woman who’s just had a tarantula drop on top of her in the bath, you just want to GET RID OF IT NOW! – is what ultimately you’re trying to achieve.

I’m presuming what you really want is stuff like: smaller government; a genuine – as opposed to an illusory, QE-driven – economic recovery; sensible environmentalism (ie conservation but not eco-fascism); liberty; an end of crony capitalism; a diminution of the power of Wall Street; a resurgence of American greatness; a renewed sense of confidence and purpose.

You’re not going to get any of that from a Romney administration.

But you will, provided you’ve got the patience, get it in 2016 from President West or President Rand Paul or President Palin or President Ryan.

Only it might be TOO LATE.

 

(Hat-tip Andrew M)